The Public Company Accounting Oversight Board today revoked the registration of a public accounting firm and barred the firm’s managing partner from association with a registered accounting firm after finding that they concealed information from the Board and submitted false information in connection with a PCAOB inspection.

The Board also censured two former partners in the firm, finding that they participated in the misconduct but noting that they promptly alerted the PCAOB and cooperated in the Board’s investigation.

“Registered accounting firms and their associated persons have a duty to cooperate in PCAOB inspections,” said Claudius Modesti, director of the PCAOB’s Division of Enforcement and Investigations. “The findings in this case demonstrate that the Board will not tolerate conduct aimed at thwarting the Board’s inspections.”

The accounting firm, Goldstein and Morris CPAs, P.C., based in New York City, was notified in September 2004 that the firm would be inspected by the PCAOB in November 2004.

The PCAOB’s Division of Registration and Inspections directed a request for information and documents to the firm’s managing partner, Edward B. Morris. The Board found that, in responding to the request, Mr. Morris and two partners, Alan J. Goldberger and William A. Postelnik, were aware that the firm had prepared the financial statements of two of its public company audit clients, contrary to auditor independence requirements of federal law. The Board found that Messrs. Morris, Goldberger, and Postelnik took steps to conceal that fact from the Board by omitting certain requested information from the firm's written response to the inspection request.

The Board also found that the partners, after learning of the imminent inspection, formulated and carried out a plan to create and back-date certain documents and place them in the firm’s audit files. The Board found that Messrs. Morris, Goldberger, and Postelnik took these steps to conceal from the Board the firm’s failure to comply with certain auditing standards.

Messrs. Goldberger and Postelnik notified the PCAOB of the omitted and falsified information. Both resigned from the firm.

The accounting firm and Mr. Morris consented to a Board order making the findings and imposing sanctions, without admitting or denying the findings. The order bars Mr. Morris from association with a registered accounting firm and revokes the firm’s registration. Firms that are not registered with the PCAOB are prohibited from auditing the financial statements of public companies.

Messrs. Goldberger and Postelnik each consented to a Board order making the findings and imposing the censures without admitting or denying the findings. The Board limited the sanctions of the two men to censures because they “promptly and voluntarily brought the matter to the Board’s attention, disclosed their own misconduct and the misconduct of others, and made affirmative efforts to provide the Board with relevant information.”

The Board’s orders are available under Enforcement at www.pcaobus.org.

Suspected misconduct by auditors can be reported to the PCAOB Center for Enforcement Tips, Complaints and Other Information by e-mail or by phone to 800-741-3158.